Page 75 - DMGT507_SALES AND PROMOTIONS MANAGEMENT

Unit 3: Motivating and Compensating the Sales Force

Relation with Product Life Cycle (PLC) Notes
All products undergo various stages of introduction growth, maturity and decline. The selling
effort is related to this (PLC) stage.
When the product is in the introductory stage it is difficult to sell the product. Therefore the sales
force must be dynamic, enterprising, willing to travel, to be able to establish the product in the
market. It should have good knowledge of the product, good communication skills and
tremendous willingness and endurance to pursue the goals that are to be achieved. Therefore in
the introductory stage direct salary will be on the higher side and indirect benefits may not be
introduced.

Growth Stage

In this stage the motivation of the sales force has to be maintained. Indirect incentive schemes
have to be introduced. Incentives can be linked with achieving targeted quarters. This will help
in the growth of the product.

Maturity

When the product firmly establishes itself the sales force needs a break. The indirect benefits
like training programmes in good environmental locales foreign trips, promotions, basic increase
in salary are given. This increases their knowledge and motivates them and gives them a new
direction to do the job.

Decline Stage

When the sales of the product starts declining then added incentives may be given to generate
fresh interest in the product. Efficient product managers who may be concentrating on different
products are given added incentive to service the sales of the declining product.

Compensation Related with Demographic Characteristics

Different compensation packages are preferred by different sales persons depending upon their
demographic characteristics, i.e., age and family life cycle. A bachelor can take high risks, is
more enterprising and with high risks high awards are also promised. He can work on a straight
commission or incentive scheme only. As one gets married he prefers stability with high basic
component. When one gets older one wants more stability and preferably a direct salary.
Age Salesmen Family Preferred Preferred
life cycle Job compensation style
20-28 Bachelor High risk, High Straight commission or
Notes
reward Aggressive incentive
company
28-35 Married with one Established company Intensive plan – Basic +
or two young and stability incentive; preferably with
children higher basic component
35 & Married with Stability and steady Preferably straight salary
above growing up job basic
children

Source: Marketing in India by S.N.

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